LuLaRoe's founders have been linked to 31 LLCs set up during the last 3 years — and a lawsuit alleges they're attempting to shield assets like a Gulfstream jet, a ranch in Wyoming, and a world-record-breaking supercar named Ruthie

A lawsuit alleges that the
LuLaRoe
founder and CEO Mark Stidham and several associates are hiding
money and assets in a web of LLCs.

Stidham and his associates have been connected to at least 33
LLCs set up since 2015, according to documents reviewed by
Business Insider. Thirty-one of those LLCs are still active.

The majority of these LLCs also list LuLaRoe's "hub" in
Corona, California, as a principal office.

In its lawsuit, the manufacturer Providence Industries
claimed that several of these LLCs were linked to assets such as
a world-record-breaking car worth over $2 million and a lush
ranch in rural Wyoming.

"We believe the claims in this case are completely without
merit and will fight vigorously against them," a LuLaRoe
representative told Business Insider in a statement.

LuLaRoe's manufacturer has filed a lawsuit against the legging
empire, alleging that the company and its leaders are playing a
shell game to avoid paying creditors.

Providence Industries, LuLaRoe's clothing supplier, is seeking
$49 million in the lawsuit, which alleges that LuLaRoe's
founders, Mark and DeAnne Stidham, along with their business
associates and relatives, have transferred "substantial assets"
to both themselves and their family members to support "lavish
lifestyles" and avoid paying creditors.

"We believe the claims in this case are completely without merit
and will fight vigorously against them," a LuLaRoe representative
told Business Insider in a statement. "Given this is pending
litigation, we cannot comment on the specifics."

Mark Stidham submitted a sworn declaration to "address some of
the patently false statements" in Providence Industries' filing,
saying the limited liability companies mentioned in the lawsuit
were real-estate and investment holding companies with "no
nefarious or improper purpose."

Business Insider has reviewed documents linking LuLaRoe and its
founders to 33 LLCs established in the past three years. Two of
the LLCs based in Wyoming - Varldspela LLC, established on April
10, and Bradham Investment Holdings, established on September 18,
2017 - were dissolved on June 18.

Here's a look at the web of LLCs and luxurious assets surrounding
LuLaRoe, its founders, and their associates:

Mark Stidham appears on the paperwork filed for some of these entities, but business associates and family members are mentioned in the majority of the LLCs.

Shayanne Gal/Business Insider

Location is the factor that ties together this batch of
companies.

Twenty-eight active LLCs - including LuLaRoe LLC, which was
established five years ago - list the address of LuLaRoe's "hub"
in Corona, California, as their principal address. A 2017
assessment record for the property says that its "land use"
pertains to light manufacturing and that it encompasses 7.42
acres.

Two other LLCs claim to share a Wyoming address with the Bronze
Buffalo Club LLC, an "exclusive club" with business ties to Mark
Stidham. Another LLC, of which Stidham is CEO, lists a
residential property in Corona as its principal office. And one
LLC's principal address is listed as that of a corporate-services
company in Delaware.

Several of the LLCs attached to LuLaRoe and the Stidhams are linked to the business itself, according to documents reviewed by Business Insider.

James Vogt, a San Diego State University lecturer and certified
fraud examiner, told Business Insider that LLCs frequently serve
a "very legitimate purpose" for businesses and people.

And Kate Andresen, a lawyer specializing in intellectual property
at Nilan Johnson Lewis, told Business Insider that businesses
with a franchise-based model or corporations dealing with
different levels of risk across functions also tend to rely on
LLCs to create a "complex business structure."

And several of the earlier LLCs linked to LuLaRoe and the
Stidhams appear to serve a clear business-related purpose.

LuLaRoe was set up as an LLC in California in 2013. The
organization was then incorporated as LLR in Wyoming in 2015,
under the names of the Stidhams and LuLaRoe's chief financial
officer, Noall Knighton.

As far as the company's intellectual property, Lennon Leasing LLC
- a Wyoming limited liability company formed on September 23,
2015, under Mark Stidham's name - holds the
trademark on LuLaRoe's logos.

And 2000 Carolina Pines Dr. LLC reflects the address of the
company's 470,000-square-foot distribution center in Blythewood, South
Carolina. The State reported that the
company bought the property for $16 million in April 2017.

LuLaRoe, the Stidhams, and their associates are linked to 19 LLCs set up in December 2017 alone, according to a review of documents by Business Insider.

Providence Industries alleged in its lawsuit that 17 LLCs linked
to LuLaRoe and its founders were established in December 2017
alone. According to documents reviewed by Business Insider, a
total of 19 active LLCs with links to LuLaRoe were established in
that month.

Providence Industries claims in its lawsuit that many of these
limited liability companies were established to help LuLaRoe and
the Stidhams hide money and assets from creditors. The lawsuit
also says Providence Industries learned that its client was in "a
precarious financial situation" toward the end of 2017.

And those LLCs appeared to have been established at a
particularly rapid-fire pace. Four were established on December
8, 2017, while three were established three days later, on
December 11, according to documents reviewed by Business Insider.
Six were established on December 14.

Among that December crop of limited liability companies, two
entities were set up in Wyoming, while the rest were created in
California.

Experts told Business Insider that establishing numerous LLCs in
one month could be a time-consuming process and might be a red
flag.

"When you start forming even a single limited liability company,
it takes time to put all the materials together," Andresen told
Business Insider. "It takes the effort of actually getting the
filings put in place, and it costs money because there are filing
fees associated with that."

Vogt said he'd also seen people use LLCs to hide or move around
assets in situations like bankruptcy cases or contentious
divorces. He said he couldn't weigh in on the specific
allegations Providence Industries made against LuLaRoe, the
Stidhams, and their associates. But he did say that the number of
LLCs in this case, as well as the timing of the filings, could
come across as "suspect" and could serve as a "red flag."

"It's certainly not an indictment," he said. "But if I was
involved, I would definitely want to investigate further."

The lawsuit alleges that some LLCs are linked to high-value assets, like Mark Stidham's two Koenigsegg cars.

Stidham isn't just a casual Koenigsegg collector - he's a figure
of some note among owners of the Swedish sports cars, appearing
in industry documentaries and feature articles.

And Providence Industries' lawsuit against LuLaRoe alleges that
its founder is holding not one, but two of the uber-expensive
vehicles under a limited liability company.

The filing says Stidham owns a Koenigsegg CCX worth about
$700,000 and a Koenigsegg Agera RS that's valued at more than $2
million. The lawsuit also alleges that the two Koenigseggs are
owned through the Ghost Squadron LLC, a limited liability company
in Wyoming that was established on December 13,
2016. Ghost Squadron LLC lists Stidham as an organizer and the
company's hub in Corona as the address of its principal office.

Legalinc, a corporate-services company, was appointed as the
company's registered agent. LuLaRoe's general counsel, Robert
Loll, is listed in documents filed with the state of Wyoming as
an authorized filer for the company. Stidham first used the
services of Loll's law firm, Floratos Loll & Devine, in 2000.
Loll came on as LuLaRoe's general counsel in November 2015,
according to his LinkedIn.

"Ghost Squadron," a nickname for a pack of Koenigseggs, is also
the name of a short documentary by Car Throttle, an online
community for car enthusiasts, published on August 31. The film
follows Stidham and a group of other Koenigsegg owners as they
meet up with the company's founder, Christian von Koenigsegg, and
attend the Exotics on Cannery Row auto show.

Ironically, one of the other owners profiled in the documentary
is Dan Kang, the CEO of MyDyer, a division of Providence
Industries. Kang declined to comment for this story.

In his interview with Car Throttle, Stidham said he first bought
the Koenigsegg CCX, then the considerably more expensive Agera,
which he dubbed "Ruthie."

"Ruthie" blasted through several world speed records in 2017 — seemingly thanks in part to yet another LLC.

Ruthie has acquired renown of its own within the world of luxury
cars, even counting the celebrity and car enthusiast Jay Leno as a fan.

The reason for the car's stardom lies partly with Straight &
Narrow LLC, which was established on July 12, 2017, and lists Mark Stidham and Marian
Brady as managers. DeAnne Stidham's surname was previously Brady.

A few months after the LLC was established, Straight & Narrow
seemed to have played a part in setting up an event in which
Ruthie set five world speed records
for a production car.

A spokesman for Straight & Narrow LLC, Joel Oscarson,
told The Las Vegas Sun that
the group was "planning on beating" Bugatti's production-car
speed record of 268 mph. The event required an 11-mile swath of
highway between Las Vegas and the unincorporated town of Pahrump,
Nevada, to close between 7 a.m. and 3 p.m. on November 4 and 5,
2017.

But those aren't the only cars that Stidham owns, the lawsuit says.

Ghost Squadron LLC isn't the only car-related limited liability
company that Providence Industries has set its sights on. The
lawsuit alleges that Inland Exotic Motors LLC, an active LLC
established on August 29 in California, also serves to shield a
stable of luxury vehicles from creditors. Mark Stidham is listed
as its CEO in a company statement from September.

In a sworn legal statement,
Patrick Winget, who abruptly left LuLaRoe as its head of
design and production in September, said he frequently saw
Stidham driving a Porsche, an Aston Martin, a custom Saleen
racer, and "other vehicles worth many millions of dollars."

In his statement, Stidham denied that he owned several cars shown
in a photo the plaintiff included in the initial filing, saying
Kang owned most of them.

Stidham, who described Winget as a "disgruntled" former employee,
also denied that he drove or owned a custom Saleen race car in
2017 and that he ever owned an Aston Martin.

The lawsuit says the Stidhams also fly in a Gulfstream jet worth millions thanks to an LLC filed in Delaware.

Koichi Kamoshida / Getty Images

Luxury cars aren't the only modes of transportation at the
Stidhams' disposal, Providence Industries said in its lawsuit.

The suit alleged that the couple operated a private plane through
a limited liability company in Delaware called 159DE LLC. The
registered agent for the company is Incorporating Services, a
corporate-services firm in Dover. In Delaware, LLCs are required
to publicly list only registered agents.

Business Insider reviewed a Delaware Uniform Commercial Code
record on Lexis-Nexis that tied the LLC to LuLaRoe. In that
filing, which was dated November 1, 2016, the address of 159DE
LLC was that of LuLaRoe's Corona hub.

The LuLaRoe representative did not comment on the function of
159DE LLC in its statement to Business Insider.

Kevin O'Leary, the president and CEO of the aviation consulting
and brokerage firm Jet Advisors, estimated that this
specific aircraft cost $28 million to $30 million in 2016. Today,
he said, the jet's value would most likely lie between $20
million and $22 million.

Several of the Stidhams' LLCs are linked to specific properties, including an expansive ranch in rural Wyoming.

One asset that features prominently in the legal clash between
LuLaRoe and Providence Industries is the spacious Stidham ranch
in Thayne, Wyoming.

Mark Stidham is one of the organizers of a Wyoming company called
WillowBrook Properties LLC, established on March 22. On the LLC's
articles of organization, Stidham's listed address appears to be
that of the ranch.

Nestled along the Salt River, the ranch borders national forests,
features a guest cabin and a four-bay garage, and presents a
perfect spot to fish for brown trout.

The ranch also frequently appears in the Stidhams' social-media
activity.

In one video, DeAnne Stidham can be
seen pointing out the heads of what she describes as a buffalo, a
moose, an elk, and "a lion guy" on the walls of what appears to
be one of the residences on the ranch.

"This is what you do when you go to the cabin," she can be heard
saying to the gathered guests and LuLaRoe sellers. "You just lay
around, and you just relax."

The ranch appears to be an important place for the Stidhams.
Mark Stidham's LuLaRoe bio
describes him as splitting his time between California and
Wyoming with his family.

In its lawsuit, Providence Industries alleges that he "showed off
pictures of his multi-million ranch property in Wyoming" during a
business trip to South Korea and Vietnam.

In 2015, the property's price was listed as $7.25 million.

Winget said that in response to complaints, Mark Stidham
indicated several times that he and DeAnne could just "jump ship"
from LuLaRoe and move to Wyoming or the Bahamas.

The LuLaRoe representative did not comment specifically on
whether the Stidhams planned to relocate in a statement to
Business Insider.

Mark Stidham denied the allegation in his sworn declaration.

"To be clear, I do not, and have never had, any intention or
plans of absconding abroad with money," he said. "To the
contrary, I remain committed to the LuLaRoe business and continue
to work daily on the business."

A separate LLC reflects the address of a Wyoming plane hangar.

Another LLC, Airport Road #25, is registered to the address of
LuLaRoe's Corona's hub and appears to reflect the address of a
jet hangar.

Airport Road #25 LLC was registered in Wyoming on August 17, 2017,
and names Marian Brady as the company's organizer. Loll is listed
as an authorized filer, and Legalinc as a registered agent.

The principal address of this active LLC appeared to be that of
the Stidhams' ranch in Thayne when the company was established in
2017. But in Airport Road #25's annual report for 2018, its
principal office was listed as the address of LuLaRoe's Corona
hub.

And the Airport Road #25 address also appeared in an invitation
to a LuLaRoe training session
hosted as recently as October 25. Guests were invited to "Hang at
the Hangar" with the Stidhams in an event billed as an "amazing
training session." It cost $20 a person. Food and beverages were
served.

Some of the LLCs linked to LuLaRoe appear to have participated in land deals worth millions of dollars.

A few limited liability companies connected to the Stidhams and
LuLaRoe appear to have sold land to one another in Nevada.

Hudsloan Land Company LLC in Wyoming was established on December
1, 2016. Its filings list Mark Stidham as a manager.

During the summer of 2018, Hudsloan Land Company sold a plot of
"unimproved land" to a Nevada LLC bearing the name of a Nevada
address. The sale price of the property was listed as $5 million.
Business Insider is declining to name the LLC to avoid revealing
a specific address connected to the Stidhams.

This LLC was established on December 19, 2017, and also has ties
to LuLaRoe through its listed manager: a Wyoming company called
Big Sky Company Ventures LLC, which was established on December
11, 2017, and lists LuLaRoe's Corona hub as its principal office.

A second active LLC, which was also
established in Nevada on December 19, 2017, lists Big Sky Company
Ventures LLC as a manager and purchased "unimproved land" from
Hudsloan Land Company LLC in the summer of 2018. The sale price
was listed as $400,000 on Lexis-Nexis.

Mark Stidham is also attached to a company called Hudsloan Enterprises Inc. Winget said in sworn testimony that Stidham asked him to help set up Hudsloan Enterprises because he had "bad credit."

Beyond the LLCs, Stidham is attached to a company called Hudsloan
Enterprises Inc. (not to be confused with Hudsloan Land Company
LLC). Like LuLaRoe, the company's name appears to be a
portmanteau of the names of the founding couple's grandchildren.
Hudsloan Enterprises was also set up in 2015, a few months after
LLR was incorporated, and Stidham is listed as an officer.

Hudsloan Enterprises appears on a California Worker Adjustment and Retraining
Notification report that said the company was terminating 265
employees in Los Angeles because of a "permanent" closure
effective February 12, 2016. Hudsloan Enterprises is also listed
as a defendant in a 2017 class-action labor lawsuit, along with LuLaRoe
LLC and LLR Inc.

Winget is listed as a "historical contact" and former CEO of
Hudsloan Enterprises in Lexis-Nexis documents.

The LuLaRoe representative did not comment on the function of
Hudsloan Enterprises.

In his sworn testimony, Winget said Stidham asked him to help set
up Hudsloan Enterprises because he had "bad credit." Winget did
not respond to Business Insider's request for comment.

The representative did not comment specifically on Winget's
claims in its comments to Business Insider, saying only that "we
believe the claims in this case are completely without merit and
will fight vigorously against them."

If you have information to share about LuLaRoe, email
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